Mortgage Checklist: What You Need to Close on a House

March 13, 2024

According to a majority of homebuyers, the most confusing part of obtaining a home loan is knowing what documents you need to close the deal. Good news: Most documentation requirements are similar, whether you are getting a conventional, USDA, VA, investment, or FHA home loan.

Whether purchasing a home or refinancing, knowing what documents you need upfront when applying for a home loan can streamline the approval process, saving you time and money.

Mortgage Application Requirements

Completing a mortgage loan application is the first step in starting the home-buying process. Think of it as an introduction to meeting someone. Lenders use an application to determine a borrower’s eligibility and collect basic information, such as address, social security number, etc. 

Mortgage Documentation Requirements

Along with a mortgage loan application, you will submit the following supporting documentation: 

  • Photo ID (current driver’s license, passport, state ID, or resident alien card and social security card) 
  • Most recent pay stubs within 30 days for each borrower. If you are building a house or have a delay in closing, your lender may need to ask for updated bank statements and pay stubs to keep your file up-to-date. 
  • Last two year’s W-2 forms for each borrower. 
  • Past two year’s personal tax returns
  • Most recent two month’s bank statements. Especially the bank account your funds for closing will be coming from. 
  • More documentation may be required if you are commission-based or have income in addition to your base salary. 

Special Mortgage Documentation 

Depending on what loan you are getting or your circumstances, your lender might request special documentation from you, such as: 

  • VA Certification of Eligibility (for VA loans only)
  • Provide proof of alimony, child support, or separate maintenance income if you are using this kind of income to qualify. 
  • Rent/lease agreements if you own rental property and federal tax forms for last year. 
  • If you are self-employed, business federal tax returns for the last two years, including K-1’s and:
    • Sole Proprietorship – Personal federal tax returns for the last two years (form 1040 and 1040A)
    • If you own 25% or more of a corporation – Federal corporate tax returns for the last two years (form 1120 or 1120S)
    • If you have a 25% or greater interest in a general partnership – The last two years of federal partnership tax returns (form 1065)
  • If you are in the middle of a divorce or recently divorced, you must provide your divorce decree or separation agreement when you apply for your mortgage. 

Mortgage Documentation Needed for Purchases 

Whether you are purchasing an investment property or a first-time homebuyer, all home purchases require these documents:

  • Copy of the purchase contract and addendums, signed and dated by all parties. 
  • Homeowner’s insurance company name and phone number. 
  • Copy of mortgage statement, tax bill, and insurance declarations page for any properties you still own before closing on the current loan you are applying for. 
  • Some loans require proof of rental history, so you might be asked for your landlord’s name and phone number. 

Related Article:

Down Payment Assistance Programs in Texas

One of the top misconceptions about buying your first home is you need a 20% down payment. You do not have to have 20% down to buy a house. In fact, the average down payment on a house is actually 13%. Moreover, a first-time homebuyer can put down as little as 3%.

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Mortgage Documentation Needed for a Refinance 

When you refinance your house, the documentation you must provide is usually less than when you purchased your home. Some refinancing plans will even allow you to streamline the process without providing much documentation: 

  • Copy of mortgage statements on any properties you own, including those you refinance. 
  • Provide copies of current homeowner’s insurance policies for all properties you own. 
  • Copy of current tax bill- taxes must be paid and up to date before you can refinance. 
  • Homeowners’ association information, if applicable. 

Tips to Follow When Buying a Home 

There are certain things borrowers should never do when buying a house: 

  • Take out more debt or apply for credit—After you submit your mortgage application and the lender has pulled your credit, DO NOT take out more debt. Doing so can affect your mortgage loan approval and, in some cases, make you no longer eligible. 
  • Lie to your loan officer – Lying about your income or employment status to your loan officer might not seem like a big deal, but it is. Lying about your income and employment is a form of mortgage fraud. If caught, you could face up to 30 years in federal prison and fines up to $1,00,000. 
  • Changing or quitting your job before the loan closes- Depending on the type of mortgage loan you are applying for, changing or quitting your job can drastically affect your approval. Mortgage lenders look at your employment history for income calculations and see if you have a stable income and employment. If you are a serial job hopper or have gaps in your employment history, this could affect the approval of your loan. Be honest and upfront with your mortgage loan officer if your employment might change, and do not lie to them. As stated above, any lie, no matter how small, can be seen as mortgage fraud. 
  • Close credit accounts – Making any change to your credit, no matter how big or small, is never a good idea when getting approved for a mortgage. Closing credit accounts can lower your credit score, affecting your approval odds and interest rate. 

Bottom Line 

Whether purchasing a home or refinancing, knowing what documents you need upfront when applying for a home loan can streamline the approval process, saving you time and money. Remember to be honest with your mortgage loan officer; they are here to help your homeownership dreams come true. 

Even though we have covered a good chunk of the documentation needed to secure a mortgage loan, please keep in that all financial situations are unique. Your lender might request more or less documentation from you at any time throughout the loan process. For more information, visit our Mortgage – Home Loans & Refinance page on our website.

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